Enhancing nicotinic cholinergic neuronal transmission transiently improves p50 auditory sensory gating in subgroups of schizophrenics, family members with impaired auditory sensory gating, and normal controls. Nicotine affects the p50 ratio and amplitude. It can affect plasma MHPG, HVA and VMA. Improved p50 auditory gating may also correlate with brief changes in objective measures of psychological functioning.